PrinciplesOfProductDevelopmentFlow.ExploitingVariability

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V1:    The Principle of Beneficial Variability

• Variability can create economic value

V2:    The Principle of Asymmetric Payoffs

• payoff asymmetries enable variability to create economic value

V3:    The Principle of Optimum Variability

• Variability should neither be minimized or maximized

V4:    The Principle of Optimum Failure Rate

• Fifty percent failure rate is usually optimum for generating information

V5:    The Principle of Variability Pooling

• Overall variation decreases when uncorrelated random tasks are combined

V6:    The Principle of Short-Term Forecasting

• Forecasting becomes exponentially easier at short time-horizons

V7:    The Principle of Small Experiments

• Many small experiments produce less variation than one big one

V8:    The Repetition Principle

• Repetition reduces variation

V9:    The Reuse Principle

• Reuse reduces variability

V10:    The Principle of Negative Covariance

• We can reduce variance by applying a counterbalancing effect

V11:    The Buffer Principle

• Buffers trade money for variability reduction

V12:    The Principle of Variability Consequence

• Reducing consequences is usually the best way to reduce the cost of variability

V13:    The Nonlinearity Principle

• Operate in the linear range of system performance

V14:    The Principle of Variability Substitution

• Substitute cheap variability for expensive variability

V15:    The Principle of Iteration Speed

• It is usually better to improve iteration speed than defect rate

V16:    The Principle of Variability Displacement

• Move variability to the process stage where its cost is lowest

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